Pattern recognition is the basic and primary ability any trader should develop in technical analysis. It may be basic development, but the perfection of pattern recognition takes extensive practice and repetitive exposure. The expert recognition of patterns helps traders to quantify and react to the changing market environment. Chart patterns are categorized into continuous and reversal patterns. These categories are further classified as simple and complex patterns. The complex patterns consist of a collection of simple patterns. The knowledge of this classification of pattern recognition and its properties gives traders greater potential to react and adapt to a wider range of trading conditions.
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